Economic Policy Reforms 2023

Ireland

See more data for Ireland on the related dashboard.

Product and labour markets functioning

Performance gaps

• Planning and permitting delays, as well as judicial reviews, constrain housing supply, exacerbating housing affordability challenges.

• There is room to promote greater business dynamism and increased uptake of new technologies.

• Regulatory burdens on start-ups are relatively onerous, due to complex regulatory procedures and the system for licenses and permissions.

Recommendations

• Streamline planning and judicial review processes, for example by establishing a special division in the High Court with sufficient tools, resources and technical capacity to reduce delays.

• Continue to reduce the administrative burdens on SMEs by creating a Single SME portal, as planned.

• Monitor business licensing requirements and the systems that facilitate them, including by linking more licensing procedures with the Integrated License Application Service.

Digital transition

Performance gaps

• The use of digital government services is relatively low, and the intangible capital intensity of public administration has declined.

• The health system is complex, with lack of adequate information and a fragmented data governance hampering the effective monitoring of healthcare spending.

Recommendations

• Introduce the “digital postbox” system, allowing for easier and secured digital correspondence between the government and citizens, and develop new digital government services that improve citizens’ interactions with public administration.

• Prioritise the adoption of the Unique Health Identifier and centralise the management of health information in a single, independent body.

Inclusiveness, social protection, and ageing

Performance gaps

• Population ageing is putting significant pressure on medium-term fiscal sustainability. The recent pension reform puts the burden of adjustment on social security contributions.

• Some segments of the population, notably those with lower educational attainment, continue to have weak attachment to the labour market. The marginal tax wedge on low-income families is high, creating disincentives for employment.

Recommendations

• Introduce a rise in the state pension age.

• Consider introducing more tax rates and bands to prevent income threshold effects that create disincentives to work, combined with targeted means-tested support to vulnerable households.

• Target training and apprenticeship support to those with lower educational attainment, especially in areas of the economy where labour supply is in high demand.

Climate transition

Performance gaps

• Planning and permitting delays coupled with judicial review concerning major investments slow the development of renewable energy capacity and increase uncertainty, which deter investment and raise prices.

• The share of agriculture in emissions is high at around 38%. If agriculture does not contribute more to emission reductions, the additional abatement costs will rise substantially for other sectors.

• Reducing emissions in the transport sector requires action across many policy dimensions.

Recommendations

• Expedite the planning process to reduce uncertainty concerning major investment in wind turbine capacity.

• Ensure that farmers face stronger economic incentives to reduce emissions in line with the rest of the economy, such as by pricing methane emissions.

• Realign transport policies to reduce private car ownership and facilitate the provision and use of low or no carbon travel alternatives.

Overall performance